mPharma, the six-year old Ghanaian startup that manages prescription drug inventory for pharmacies is buying Kenya’s second largest pharmacy chain, Haltons. This transaction means that mPharma will control the 20 Halton stores split between Nairobi and Mombasa. It is currently working on completing a $12 million Series B fund round led by 4DX, Accra/San Francisco and Nairobi-based Novastar venture capital firms.
Although the deal is still subject to regulatory approval, it confirmed $9.7 million and the full round is expected to be completed in a couple of weeks with other investors. The investors include Unbound Ventures, the VC arm of India’s Bharti Mittal Family office; early Facebook investor Jim Breyer; and former Novartis CEO Daniel Vasella who joined mPharma’s board. The startup raised $6.6 million in Nov 2017 after a seed round of $5 million in 2015.
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mPharma was founded by Greg Rockson to significantly improve the efficiency of pharmaceutical supply chains by making prescription drugs in emerging markets easily accessible, and easily affordable. Its proprietary Vendor Management Inventory (VMI) system is already being used in over 250 pharmacies in Ghana, Nigeria, Zambia, and Zimbabwe.
Rockson said the unusual deal came about as part of conversations to market its VMI platform to the chain but realized there was an opportunity to prove just how much the efficiencies of managing both front end and back end could help African pharmacies drive down inventory.
“Through our QualityRx service, we’re starting to invest in improving the customer experience and pricing that patients get from pharmacies,” says Rockson. “Haltons will serve as testing ground for us to develop patient-centered services we can provide to our franchise pharmacies. This way we can encourage lower margins and pass the savings on to the customers.”
The startup is taking control of Haltons from Fanisi Capital, a Mauritius-based private equity firm, but senior management at Haltons will retain a stake in the business.
Mary Ngige, Haltons’ Managing Director, said the attraction to the deal was about improving efficiency within the pharmacy’s supply chain using better inventory management software which ultimately aligned with Halton’s own mission to improve drug accessibility and affordability. “This is a volume business and their technology will help us fine-tune our model and improve competitively.
In the near term, mPharma’s team is focused on expanding its VMI and QualityRx platforms to over 14,000 community pharmacies in Ghana, Nigeria, and Kenya. In the longer term, Rockson is considering working with African governments to help improve drug availability through better-centralized systems.